Health Economics and Outcomes Research

Boost your health economics and outcomes research efforts

Marketing approval, once a critical end goal, is now a milestone on the road
to brand success - reimbursement is the true objective, especially in today's
harsh market access environment. To navigate the challenges that come with
lower reimbursement rates, companies pump resources into market access,
pricing and pharmacoeconomics.

The process starts with the health economics and outcomes research (HEOR)
team. Health economics work fuels market access, and the prominence of HEOR
teams increases as companies struggle to establish product value.

Structure Health Economics Teams to Hit Company Goals

Finding optimal HEOR structure and internal alignment is elusive. Weigh the
advantages of different organizational approaches, and see how factors such as
reporting lines, leadership and staffing levels position HEOR teams to advance
companies toward larger objectives - without losing focus on crucial
individual markets.

Benchmark HEOR Budgets and Tasks

Health economics teams balance their time and money across a number of
in-house and outsourced activities. Benchmark spending and prioritize
responsibilities to focus HEOR teams on tasks with the greatest return.

Overcome Internal and External HEOR Challenges

Coordinating internal stakeholders while addressing the needs of different
markets proves challenging for all HEOR groups. Improve team flexibility and
plan for the emerging importance of factors such as patient-reported outcomes,
risk-sharking, value-based pricing and global economic instability.

key finding

More Companies Are Moving HEOR to Medical Affairs and Away from the Commercial Organization

Health economics and outcomes research is arguably more clinical or medical in
nature than other market access-related functions. As a result, some companies
separate HEOR from pricing and reimbursement. Many locate HEOR under medical
affairs, away from the more commercially oriented pricing and reimbursement
functions. Figure E.1 [Figure included in Full Report] shows that 29% of
companies now house HEOR under medical affairs. When Cutting Edge Information
last surveyed HEOR teams in 2010, this percentage was only 10%.

Proponents of the move to medical affairs argue that medical affairs has a
“higher focus on integrity” than commercial teams. This focus
allows health economics teams to truly concentrate on the science surrounding
the brand, not its commercial promise. Also, it provides a closer link to
medical information and publications teams - valuable outlets for HEOR
messages.

However, as with any structure, the medical affairs alignment presents
challenges for HEOR teams. The largest challenge is that teams located under
medical affairs are more academic in nature, researching the data for the
data's sake. This tendency can sometimes limit the commercial impact of the
HEOR messages. Since the HEOR messages drive the overall market access
strategy, not having commercially oriented messages can stunt the brand's
revenue stream.

According to the director of health economics at a US biotech company,
“It doesn't really matter where you sit because the whole discipline -
like everything in the pharma world - is to sell drugs. Whether you sit in
marketing or medical affairs, you have to be completely honest in what you do.
The payer will see right through you. If you only focus on the data that you
like, it's going to come back and hit you in the end. The data is the data,
and it doesn't matter which department sponsors it.”

Even so, HEOR's move to medical affairs suggests that for many companies, the
ties to medical affairs are stronger than those to commercial. For now, at
least, the teams will be more research focused.